stimated costs to complete 2,000,000 - Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2021, and 2022, respectively, Hayes should report gross profit of $1,350,000 and $900,000. $4,500,000 and $3,000,000. $1,500,000 and $750,000. $0 and $2,250,000.

Question

Alissa Skinner

Business

10 December, 12:24

stimated costs to complete 2,000,000 - Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2021, and 2022, respectively, Hayes should report gross profit of $1,350,000 and $900,000. $4,500,000 and $3,000,000. $1,500,000 and $750,000. $0 and $2,250,000.

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Shawn · Answer 1

Year 2021

Completion Percentage = 3,000,000 / (3,000,000 + 2,000,000) * 100

Completion Percentage = 60%

Gross Profit = 60% of $7,500,000 - $3,000,000

Gross Profit = $1,500,000

Year 2022

Completion percentage = 100%

Gross Profit = $7,500,000 - $7,500,000 * 60% - $2,250,000

Gross Profit = $7,500,000 - $4,500,000 - $2,250,000

Gross Profit = $750,000